If your dispute with your partner has ended up in litigation, or maybe you have a friend or family member who has had a business dispute end up in litigation, you may have heard the term “SLC”. But what does that mean? SLC is an abbreviation for Special Litigation Committee. The SLC wields enormous power in the context of derivative…
Whether it be a small business owned with family, with friends, or with strict business partners, none of us go into business hoping for litigation. The Operating Agreement for a limited liability company (“LLC”) and the Bylaws for a corporation each respectively govern the internal relations amongst the business owners and with the business. The freedom to contract under the…
Often small business owners, especially when working with family or friends, seek to resolve business disputes without having to bring litigation. Avoiding litigation may be of paramount importance. While it is not always feasible to resolve such disputes short of litigation, in certain circumstances, there are tools to be able to amicably resolve intra business disputes without filing litigation. Having…
The reasons an owner dispute is triggered are never the same. Having handled several member and shareholder litigations, none of the disputes started the same way or involved the exact same circumstances. There are, however, some common themes that oftentimes lead to a dispute between owners. Usurpation of corporate opportunities, shareholders/members standing on both sides of a transaction, and breaches…
Most businesses in Minnesota are considered “closely held”. As it relates to a corporation, that means having 35 or fewer shareholders. Shareholders are the individuals that hold stock in the corporation – they are the owners. Being a shareholder in a closely held corporation has both pluses and minuses, just as being a shareholder in a publicly traded company does. …
A frequently asked question for closely held corporation shareholders is whether the shareholders owe each other any fiduciary duties? The answer is yes. In a closely held corporation, defined as a corporation with 35 or fewer shareholders, shareholders owe a duty to deal openly, honestly and fairly with other shareholders. If you are a controlling shareholder in a closely held…
For most closely-held business owners, their business constitutes all or a large part of their assets and retirement savings. These owners have been pouring blood, sweat, tears and their savings into keeping the business running. As such, ensuring that the business they worked hard to develop is either maintained in the manner the owner deems appropriate or sold to leverage…
That all depends. The type of business, tax consequences, liability protections, and goals all impact what type of entity will provide your business with the ability to meet your goals. It is important to take the time to discuss what your business will be doing, how it will be doing it, and what the goals of your business are with…
Working with family can be an amazing blessing. I know – I am fortunate to work with my dad and step-mom. No one has your back and your best interests in mind like family. But working with family can also add stress and strife if everyone is not on the same page. We have found that clearly defining expectations, goals,…